Make more money in 2012 with goal-setting ideas from salons that enjoyed a strong 2011.

If you do just one thing this year, set a goal to brand yourself and your business. That’s the advice from Angelo, owner of Angelo David Salon, which has become the premier place for high-end hair extensions in salon-dense Midtown Manhattan. In 2011, the salon was booked solid weeks in advance, thanks to its specialty, but also, because Angelo retooled his website, menu and private-label line for total branding.

“You have to give clients service, service, service,” says Angelo. “But you also have to get your message across.”

Get Started

To find services to grow or areas to improve, sit down with your accountant and review your monthly records (if you are a stylist) and your profit and loss statement (if you are an owner). Compare 2011 to 2010 in every area. If you don’t have good records and documentation of how much money you made, how you made it, and exactly what your related professional expenses are, then that’s your first goal.

“Objectives are useless without strategies and follow-up,” notes Eric Fisher, owner of Eric Fisher Salons and Academy in Wichita, Kansas. “Find a way to measure results, then set specific goals.” (Fisher’s fl agship salon grew by 17 percent last year; Eric Fisher East grew 7 percent and his school clinic was up 40 percent.)

Keep It Real

When setting new goals that require an investment, base what you do on covering the bills first, advises Jenny Grisham, owner of Americana in Alpine, Texas. “What’s most important is maintaining your profit margin.”

If think you aren’t large enough to use the same strategies that mega salons do, take note: Grisham’s salon has had just four employees for 15 years— there are 6,000 people in her town. She’s met goals of recruiting and retaining a great staff, and increasing service sales: The salon’s productivity is at 85 percent. Knowing her prices are as high as the area will allow, she’s set her 2012 goal to have a net profi t of 15 percent and use a 10 percent increase in retail to get there.

“Retail is part of customer care,” says Grisham. “We’re using sampling to boost it.”

Four Square

After years of number tracking, Fisher says there are four key areas every salon should focus on when goal setting.

1. Average Ticket

Strategy: be an order maker not order taker. Ask yourself, what would make each client look better, from defined brows to highlights or better-conditioned hair. At Fisher’s salon, the goal is to boost the average ticket by 20%. (Keep this separate from retail.) Or, add 20% to the price of a cut. Fisher’s salons have nine different price levels, making any 20% increase relative to experience.

2. Retail

A realistic objective is to sell an average of $9 per client or a minimum of 20 percent retail to service. “Retail is the most profitable part of our business,” says Fisher. “Our salon software has an app that every stylist can put on an iPhone. When they check it, they see their history and exactly how close to goal they are for any given day.”

Fisher tracks retail on a daily basis. Not only does this give it importance, it makes it easy to use coaching. If it is noon and a stylist is at 47 percent of his retail goal, the manager can say, “If you sell just two more products, you’ll reach your goal.” Then, the manager can suggest dialogue or see which client on the books has color-treated hair but hasn’t bought color-protective shampoo.

“This generation of stylists want to see results for immediate gratifi cation, not read or go to a meeting to hear about their results,” notes Fisher.

3. Frequency of Visits

Say you want to see 50 clients a week. Comparing five and eight week turns, if your clients return every 8 weeks, you need 400 clients; if they return every five weeks, you need 250. The support system for this goal, says Fisher, is prebooking, which allows you to make the same amount of money on 150 fewer clients.

“Securing the appointment before the client leaves ensures your financial success, and helps the client maintain her look,” he notes. “Give stylists a script they can practice until it sounds real. Measure this goal monthly.

4. Client Retention

With so many levels in the salon, it took Fisher a lot of strategizing to determine what retention should look like. Sometimes a retention rate might be 60 percent because a client could not get in and chose another stylist in the salon. A Master Stylist should be at 50% but the rate is rarely over 75%. After all, the idea is to be able to raise prices to attract and retain increasingly more valuable clients.

“Demand matters, too,” says Fisher. “If you saw 15,000 clients in 2010 and 12,000 in 2011, you’re in trouble. Look at the number of clients each person sees daily and if it goes down, evaluate what is going wrong. Then create a strategy.”

“Do you need to post makeovers on Facebook or Tweet a promotion? You don’t have to cheapen your image with discounts. Ask who has not come back and why. People want to go where they feel good about themselves, which costs nothing.”

A Simple Plan

Jenny Grisham, owner of Americana in Alpine TX, says any salon can grow with her goal-setting approach.

• Determine what is realistic by looking at past performance. Keep expenses in mind—don’t over invest the new before the bills are paid.

• Find one major area you know you have room to grow…productivity, retail, capacity (adding hours or chairs) or haircolor. Focus on that area.

• Provide the tools for success, then discuss and set specific, realistic goals with the staff and consistently measure results for accountability.